Costco
COST, +2.43%
is unquestionably one of the world’s favorite places to shop. The membership warehouse club, based in Washington state, has seen its annual sales skyrocket over the last couple of decades, from $16 billion to $110 billion. But shares fell Wednesday after the company reported a surprising 3.2% decrease in first-quarter earnings, amid slowing growth in membership fees. While there are plenty of reasons why Costco is so popular — starting with its low prices, of course — there are ways Costco stymies many a shopper. Consider these examples:

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Only one credit card option

When you shop at most prominent retailers, you can pay with any number of credit cards. But at Costco, your only choice has been American Express. Now, that option is going away, though Costco recently announced it will start taking Visa
V, -0.04%
in place of Amex
AXP, +0.83%
in 2016. But why only one choice in any case? Bob Nelson, a Costco vice president, says in the case of Amex, it was simply part of the agreement’s terms: “It was an exclusive contract.”

On online review sites, Costco members often complain about long checkout lines and the lack of express lanes. And while Consumer Reports gave the warehouse chain a top ranking, it cited the slow checkout process as one of the “chinks in Costco’s armor.” Nelson says Costco has made “great strides” in recent years to speed things up, with cashiers now averaging close to 50 customers an hour (previously it was less than 40). But he acknowledges that in higher volume locations, the wait can be an issue, though he’s hoping improved technology — think scanning “tunnels” — may speed the lines up in the future.

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Here today/gone tomorrow items

Ever have a favorite Costco item that suddenly disappears from its shelves or online? It’s another pet peeve among members, who note the sudden absence of everything from a brand of pork tenderloin to a brand of coffee. Nelson says it’s just the reality of retailing and that the reason could be a supplier issue or the fact the item was not selling well. “Every (disappearing) item has its own story,” he says.

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No shopping bags

The most you’ll get at Costco is a recycled cardboard box. (And issues can sometimes apparently arise with cashiers running out of those, too.) Nelson says it’s all about cost: If Costco provided shopping bags, it would have to charge more for the items it sells. He also says he has not heard any issues about availability of cardboard boxes.

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And no delivery (from warehouses), either

You’ve just bought a boatload of groceries from your local Costco. Or a big individual item — like a couch or mattress. Now, how are you going to get everything home? Good question. Costco doesn’t offer delivery from its stores — a point that has been particularly raised when Costco is compared with other retailers. Still, Nelson says delivery options are available when shopping Costco online. Plus, Costco is now offering same-day delivery for some items in select markets through Google Express.

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Limited shopping advice

Shop at any electronics store and you can usually expect a salesperson to offer plenty of suggestions about what kind of television to buy. The same goes at a wine and liquor store when it comes to picking a nice bottle. But at Costco, there are a limited number of staffers providing any such advice. Again, Nelson says it’s about keeping costs down, so that prices can stay low. But he also says in the Internet age, customers can usually gather enough information to make informed decisions on their own.

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The great hot dog controversy

Costco is famed for its $1.50 hot dog-and-soda deal — the warehouse chain reportedly moves more than 80 million franks a year through its food concessions. But some of its members were mighty miffed a few years ago when Costco changed the beloved hot dog, going from one it purchased through suppliers to one it made on its own. The controversy seems to have died down, and Nelson says that’s for a good reason: The new hot dog is selling well. “If it wasn’t, we’d have the old hot dog in,” he adds.

Bloomberg

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The great hot dog controversy

Costco is famed for its $1.50 hot dog-and-soda deal — the warehouse chain reportedly moves more than 80 million franks a year through its food concessions. But some of its members were mighty miffed a few years ago when Costco changed the beloved hot dog, going from one it purchased through suppliers to one it made on its own. The controversy seems to have died down, and Nelson says that’s for a good reason: The new hot dog is selling well. “If it wasn’t, we’d have the old hot dog in,” he adds.

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